Nuclear Decommissioning Authority staff to vote on pensions deal

Nuclear Decommissioning Authority (NDA) employees who are members of trade unions GMB and Unite are to vote on proposals to replace the government organisation’s current final salary pension scheme with a career average revalued earnings (CARE) arrangement.

The consultative ballot will open on Monday 12 June 2017 and close on Friday 30 June 2017.

The change would affect 16,000 employees if the proposal is successful. The deal includes replacing a final salary scheme with a CARE arrangement. This would involve an increase in the accrual rate, rising from 1/80 of pensionable pay and a lump sum of 3/80 of pensionable pay for each year of service to an accrual rate of 1/58 of pensionable pay in the CARE scheme with no additional lump sum. This represents an increase of 38% in the accrual rate.

The proposed CARE arrangement, which is still a defined benefit (DB) scheme, would also see member contributions increase by a total of 3.2% of pensionable pay. Contributions would be tiered according to the level of tax relief members receive on their contributions.

This would mean that employees eligible for 20% tax relief would pay a 7% contribution, those eligible for 40% tax relief would have to pay a 9% contribution, and those set to receive 45% tax relief would contribute 11%. Employees on low incomes who do not receive tax relief would not have to increase their pension contributions.

Contributions would rise by a maximum of 1% a year until the required level of contribution is reached.

A further change is how the scheme is revalued. The CARE scheme would increase in line with the Consumer Price Index (CPI), while with the current final salary scheme, accrued pension benefits rise in line with salary increases in the period before the member retires or leaves.

Many of the established benefits linked to the scheme, such as ill-health benefits and death in service, would remain unchanged under the proposed changes.

The proposals were compiled by energy minister Jesse Norman, and trade unions Unite, GMB and Aslef.

An spokesperson at NDA said: “Earlier in the year, the NDA ran a consultation process with all affected employees across its estate. Discussions with the trade unions on this issue are already well advanced; the unions seeking the views of their members is an important part of this process.”

Kevin Coyne, national officer for energy at Unite, said: “After more than a year of intensive negotiations, we believe that on the pension issue this is the best deal that can be achieved by negotiation. A significant achievement was to roll back the £620 million savings demanded by the Treasury to a more manageable figure of £320 million.

“The proposals remove the protections that the unions won for the [employees] on the denationalisation of the industry in the 1990 Electricity Act, but an amendment to the act will ensure the CARE scheme will inherit new protections. Unite is currently conducting a major briefing exercise to inform our members of the new proposals and what it means to their future retirement incomes.”

Justin Bowden, national secretary for energy at the GMB, added: “Following the threat by GMB and the other unions of the first strike in the nuclear industry for a generation, intervention by the energy minster Jesse Norman led to genuine negotiations and replacement of the £660 million raid on GMB members’ retirements with an improved ‘pay more to get more pension’ offer.

“GMB delayed consulting our members on the improved offer until after the general election. GMB members will now be balloted on the improved offer from 12 June until 30 June with the recommendation that this is the best that can be from negotiations.”